Chapter 7 Instructors GuideWord格式.docx
《Chapter 7 Instructors GuideWord格式.docx》由会员分享,可在线阅读,更多相关《Chapter 7 Instructors GuideWord格式.docx(9页珍藏版)》请在冰豆网上搜索。
(SeeTable7-1)
AuditEvidenceDecisions(page173)
Thefourauditevidencedecisionsareexplainedthroughoutthecourse.Listthemontheoverhead,defineanddiscussthem.
(SeeT-7-1)
Alsodefineanauditprocedure.Fortheauditprocedure,obtainaccountsreceivableconfirmations,askstudentstotellhowandunderwhatcircumstancessamplesize,itemstoselect,andtimingshouldvary.Thepurposeistogetstudentstothinkaboutdecisionmaking.
PersuasivenessofEvidence(page174)
Wespendafewminutesdiscussingwhatpersuasivenessmeansanditsdistinctionfromcertainty(andconclusive).Wethencoverthedistinctionbetweenappropriatenessandsufficiency.Wealsodiscussthefactorsaffectingreliability.
(SeeT-7-2)
Itisalsoworthwhiletodiscussthereliabilityofvarioustypesofevidence.
TypesofAuditEvidence(page177)
Defineanddistinguishbetweenprocedures,typesofevidence,andgenerallyacceptedauditingstandards.
(SeeFigure7-1)
Atthatpoint,listontheoverhead,askquestions,ormakeobservationsabouteachtypeofevidence:
(SeeT-7-3)
PhysicalExamination(page178)
⏹Define
⏹Appliesonlytotangibleassets
⏹Assetsapplicableto(cash,fixedassets,securities,etc.)
⏹Reliability
⏹Forwhatpurposesitisusefulandnotuseful
⏹Providesanopportunitytohavedirectcontactwithbusiness
Withregardtothelastpoint,ausefulteachingtechniqueistoselectanindustry(e.g.,cementmanufacturing)anddescribehowitworksandwhatassetstheauditormightexamine.Thegoalistogetthestudentstorealizehowimportantknowledgeofthebusinessistoperformingrudimentaryauditproceduresinaproperfashion.
Confirmation(page179)
⏹Fourcharacteristics-
1.Receipt(Notenegativeconfirmationofreceivablesasanexception.)
2.Oralorinwriting
3.Fromindependentthirdparty
4.Informationrequestedbyauditor
⏹Typeofinformationconfirmed(Table7-3,page180)
⏹Reliabilityandcost
⏹Whyitisnotusuallyusedfortestsofcontrolsandsubstantivetestsoftransactions
(SeeTable7-3)
Documentation(page180)
⏹Examples
⏹Distinguishfromphysicalexamination
⏹Internalversusexternaldocuments
-Reliability
-Examples
⏹Whereitislikelytobeused
⏹Electronicevidence
Problem7-31isusefulatthispoint.
AnalyticalProcedures(page181)
Webelieveanalyticalproceduresareanessentialpartofauditing.Studentsareintroducedtothepurposesofanalyticalproceduresinthischapter.Moredetailedcoverageofratiosandtheuseofanalyticalproceduresinunderstandingtheclient’sbusinessandassessingriskisincludedinthenextchapteronauditplanning.Analyticalproceduresforspecificaccountsarediscussedthroughoutsubsequentchapters.
⏹Whentheyareused
⏹Purposes(T-7-4,T-7-6)
⏹Examples(T-7-5)
(SeeT-7-4,T-7-5andT-7-6)
ForT-7-6,theanswersare:
1.A,D6.B
2.B7.A,D
3.C8.C
4.A,E9.A,D
5.C10.B
InquiriesoftheClient(page182)
⏹Oralandwritten
⏹Defineletterofrepresentation(whichwillbediscussedinChapter24)
⏹Whytheyareused
⏹Legalimplicationsifcorroborativeevidencenotadded
⏹TieintoBarChriscaseinChapter5
Recalculation(page182)
Reperformance(page182)
⏹Needforotherevidencetotestdetailsevenifnomisstatements
Observation(page182)
⏹Distinguishfromphysicalexaminationanddocumentation
⏹Whenitisused
⏹Definecorroborativeevidenceandwhyneeded
Problem7-32isonewealwaysusetoteststudents'
knowledgeoftypesofevidence.Problems7-33,7-34,and7-37arealsogoodonesatthispoint.Problem7-37isespeciallyusefultodiscussreliabilityofevidenceindifferentsituations.Ifthereistime,itisalsousefultosummarizethisdiscussionbyhavingthestudentsdevelopahierarchyofevidenceintermsofitsprobablereliability.Wesuggesttheyshouldarriveatthethree-levelhierarchyshowninT-7-7.
(SeeT-7-7)
Afterdiscussingtypesofevidence,itisdesirabletoreturntotheappropriatenessofeachtypeofevidence.Table7-4(page183)isusefulforthat.
(SeeTable7-4)
Ifyouhavetime,relatethetypesofevidencetobalance-relatedauditobjectivesinChapter6.ThiscanbedoneconvenientlywithProblem7-36.
TermsUsedinAuditProcedures(page185)
Wecoverthetermsfordefinitionalpurposes.First,gooverthetermsbriefly.Problem7-38isusefultohelpstudentslearnthecorrectuseofterms.
AuditDocumentation(page185)
Theendofthechaptervignetteonpage193–“WillitStandUpinCourt?
”–isagoodstartingpointforyourdiscussionofauditdocumentation.Thevignetteisanexcerptfromthedepositionofanauditorwhowasinchargeofanauditsixyearsago.Itillustrateswhatcanhappenwhenauditfilesdonotadequatelydocumenttheauditproceduresperformed.
Wespendlittletimeonauditdocumentationformatbecausefirmshavetheirowntechniques.Studentsoftenhavedifficultyunderstandingwhateachtypeofauditschedulemeans.Brieflycoverthefollowing:
⏹Purposes
⏹Relationshipofauditdocumentationtofinancialstatements
⏹Commoncharacteristicsofauditdocumentation
⏹Ownershipofauditfiles
⏹Confidentialityofauditfiles
Ifyouwishtoassignproblemmaterialforauditdocumentation,Problem7-40isagoodone.
Wediscusshowinformationtechnologyhaschangedthenatureoftheevidenceavailabletoauditors,andthewayauditsareconductedanddocumented.Wenotethattheterm“auditdocumentation”isnowusedinsteadoftheterm“workingpapers”,althoughthelattertermisstillacceptable.
Weliketogiveafewexamplesofhowinformationtechnologyhasmadetheauditmoreefficient.Ifmanyofthestudentsinyourclasshaveinternshipexperience,youcanaskthemtogiveexamplesofhowtheydocumentedtheiraudittesting.
RequirementsforRetentionofAuditDocumentation(page187)
BesuretoemphasizethenewSarbanes-Oxleyrequirementsforauditorsofpubliccompaniestoprepareandretainauditworkingpapersandotherinformationrelatedtoanyauditreportforaperiodofsevenyears.ThiscomponentoftheSarbanes-OxleyActislargelyinresponsetotheallegeddocumentshreddingbyAndersenemployeesrelatedtotheEnronaudit.Weliketodiscussthedifferenttypesofdocumentationthatnowmustbemaintained.Studentsfinditinterestingtolearnthatevenemailrelateddocumentationmaybesubjecttotheretentionrequirements.
CHAPTER7
CROSS-REFERENCEOFLEARNINGOBJECTIVESANDPROBLEMMATERIAL
LearningObjectives
Review
Questions
Multiple
Choice
Discussion
Questionsand
Problems
ACLProblemandCases
7-1Contrastauditevidencewithevidenceusedbyotherprofessions.
7-1
7-2Identifythefourauditevidencedecisionsthatareneededtocreateanauditprogram.
7-2,7-3,7-4
7-6
7-3Specifythecharacteristicsthatdeterminethepersuasivenessofevidence.
7-5,7-6,7-7,
7-8
7-29
7-37
7-4Identifyandapplytheeighttypesofevidenceusedinauditing.
7-9,7-10,
7-11,7-12,
7-13,7-14,
7-15,7-16
7-31,7-32,
7-33,7-34,
7-35,7-36,
7-37,7-38
7-41,7-43
7-5Understandthepurposesofauditdocumentation.
7-17,7-18,
7-19,7-25,
7-26
7-30
7-39,7-40
7-42
7-6Prepareorganizedauditdocumentation.
7-18,7-19,
7-20,7-21,
7-22,7-23,
7-24
7-7Describehowe-commerceaffectsauditevidenceandauditdocumentation.
7-27,7-28
FOUREVIDENCEDECISIONS
●Auditprocedures
●Samplesizeforagivenprocedure
●Itemstoselectfromthepopulation
●Timing
FACTORSAFFECTINGRELIABILITY
OFEVIDENCE
●Independenceofprovider
●Effectivenessofclient'
sinternalcontrol
●Auditor'
sdirectknowledge
●Qualificationsofprovider
●Objectivity
●Timeliness
TYPESOFEVIDENCE
●Physicalexamination
●Confirmation
●Documentation
●Analyticalprocedures
●Inquiriesoftheclient
●Recalculation
●Reperformance
●Observation
PURPOSESOFANALYTICAL
PROCEDURES
●Understandtheclient'
sindustryandbusiness
●Assessgoingconcern
●Indicatepossiblemisstatements(attentiondirecting)
●Reducedetailedtests
USEOFINTERNALRATIOS
Explainhoweachofthefollowinganalyticalprocedurescanbeusefultotheauditorindeterminingevidencetoaccumulate.Whenwouldeachonebemost